CEO Position on EU Carbon Border Adjustment Mechanism (CBAM)

16 September 2024

The need for a level-playing field:

European tool industry calling for inclusion of downstream products in EU Carbon Border Adjustment Mechanism (CBAM)

Introduction

The European Tool Association (CEO) is the association of European hand tools, power tool accessories and construction fixings manufacturers, representing the interests of around 180 member companies. The European tool industry generates an annual turnover of over €30 billion [1] and is deeply committed to the production of high quality products in the European Union as well as to open and fair international trade relations.

While we fully support the EU goal to achieve carbon neutrality by 2050, we are concerned by the repercussions of the European Green Deal and the gradual phase-out of free emission allowances under the EU Emission Trading Scheme (ETS) on the competitiveness of the European tool industry.

Our key request: The inclusion of hand tools and power tool accessories under CBAM

We welcome the introduction of the EU Carbon Border Adjustment Mechanism (CBAM) aimed at offsetting competitive disadvantages for European companies and preventing the relocation of production facilities outside the EU (carbon leakage).

However, in its current form CBAM only applies to raw materials such as steel and some narrowly defined downstream products (e.g. construction fixings such as screws and metal anchors). It does not apply to finished complex goods such as hand tools and power tool accessories despite their high steel content. Hence non-EU producers would be allowed to export their finished goods to the EU internal market without the need to acquire CBAM certificates for their products.

Against this background, we call on the European Commission to propose the inclusion of hand tools and power tool accessories under HS Codes 82 in the Annex of Regulation (EU) 2023/956. This will re-establish a level-playing with non-EU producers of hand tools and power tool accessories in the EU Single Market and safeguard the competitiveness of European producers of these products.

You can find the full text of the CEO Position Paper in the Download section below.

[1] Data source: Latest available EUROSTAT figures (2020)